Correlation Between Open Text and Informatica

Can any of the company-specific risk be diversified away by investing in both Open Text and Informatica at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Open Text and Informatica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Open Text Corp and Informatica, you can compare the effects of market volatilities on Open Text and Informatica and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Open Text with a short position of Informatica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Text and Informatica.

Diversification Opportunities for Open Text and Informatica

0.28

Correlation Coefficient

Open Text  Informatica

Modest diversification

The 3 months correlation between Open and Informatica is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Informatica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Informatica and Open Text is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Open Text Corp are associated (or correlated) with Informatica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Informatica has no effect on the direction of Open Text i.e., Open Text and Informatica go up and down completely randomly.

Pair Corralation between Open Text and Informatica

Given the investment horizon of 90 days Open Text Corp is expected to under-perform the Informatica. In addition to that, Open Text is 16.65 times more volatile than Informatica. It trades about -0.04 of its total potential returns per unit of risk. Informatica is currently generating about -0.01 per unit of volatility. If you would invest  2,480  in Informatica on September 11, 2025 and sell it today you would lose (1.00) from holding Informatica or give up 0.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	81.25%
Values	Daily Returns

Open Text Corp  vs.  Informatica

Open Text Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Open Text Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Open Text is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Informatica

Risk-Adjusted Performance

Weakest

Over the last 90 days Informatica has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Informatica is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Open Text and Informatica

The main advantage of trading using opposite Open Text and Informatica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Text position performs unexpectedly, Informatica can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Informatica will offset losses from the drop in Informatica's long position.

The idea behind Open Text Corp and Informatica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.